A Great Customer Management Program Preserves Your Customer Base
Through a good customer management program, your refund policy can be pretty much whatever you say it is, as long as your customers are aware of it.
By placing your policy in a conspicuous place and consistently informing your customers during interactions with them help to prevent misunderstandings.
However, smaller merchants do not have anonymity to operate behind the veil such as the big box retailers. Sometimes merchants know their customers personally and this would hinder sales by being uncompromising on refunds.
With that being said, gift cards can be worked into the overall customer management design.
It will come as no secret that a refund policy is to some degree affected by the type of merchandise sold. A boutique would not be expected to accept a dress for return that has been stained, but this is not the same as merchandise that is defective.
Refunds are generally categorized by the circumstances and tender offered at the sale:
1.) Was the merchandise paid for by cash, check or credit card?
2.) Was the merchandise on sale with a sign that says, “No Returns of SaleMerchandise”?
3.) Does the customer have the receipt?
4.) Is the merchandise specific to the store (such as a designer dress which couldhave come from nowhere else)?
As all these are specifics… commonly speaking, gift cards used as a form of customer management can be successfully used as refunds, particularly where there is no receipt present. This will, in essence, retain the sale.
The numbers work like this. The item you sold for $100.00 has a COGS of 35%, so your cost is $35.00.
You retain the customer and, if keeping in line with statistics, you may even profit an additional 20%. Gift cards can be a win, win for you and your customer.
Gift cards are an excellent tool to retain customers and maintain your relationship with that customer. By utilizing gift cards you are keeping the pipeline of communication open and creating a since of value for your customer due to the flexibility that you provide when issues arise.
As a consumer I take refund policies into an account when I decide where to shop. If that is a factor for me, I am very confident that it is a factor for many of your customers. If you don’t have the flexibility to provide a commodity such as refunds via gift cards you are doing your business a great disservice.
Smaller brand stores don’t have the advertising budget or the name to retain customers like big box chain stores so you have to maintain a customer’s interest through the use of customer management tools.
I would never expect refunds to be given for just any circumstance, however employing a very generous means to returns mean customers return because they feel that you stand behind the goods and services that you sell.